4/6/79 [3]

Folder Citation: Collection: Office of Staff Secretary; Series: Presidential Files; Folder: 4/6/79 [3]; Container 113

To See Complete Finding Aid: http://www.jimmycarterlibrary.gov/library/findingaids/Staff_Secretary.pdf

http://www.jimmycarterlibrary.gov/library/findingaids/Staff_Secretary.pdf

THE WHITE H08SE

WASHINGTON

April 5, 1979

MEMORANDUM FOR THE PRESIDENT

FROM: Frank Moore

SUBJECT: Your Meeting with Senator Ribicoff at 9:45 a.m., Friday, April 6

Before your meeting with Senator Ribicoff Friday morning, it is important that you have a few bits of information not included in the briefing paper:

• Senator Ribicoff had originally scheduled a hearing on our regulatory reform proposals for 10:00 a.m. Friday. Because of his meeting with you at 9:45 a.m., he has delayed the hearing until 11:00 a.m.

·

• The Senate Governmental Affairs committee agenda is replete with Administration initiatives· and issues. We are in frequent contact with his staff in an effort to prevent bottlenecks and conflicting demands. Among the issues currently before Ribicoff's committee, or scheduled to come before the body this year, are:

* Reorganization Plans

Natural Resources

Alaska gas pipeline

Foreign assistance

Economic Development

Surface Transportation

* Authorizations

Office of Federal Procurement Policy

President's Commission on Pension Policy

* Confirmations

John White, Deputy Director, OMB

Electrostatic Copy Made for Preservation Purposes

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* Confirmations (Coat.)

Scotty Campbell, Director, OPM

Adm. Freeman, Administrator, GSA

* New Initiati.ves

Federal Compensation Reform

Regulatory Reform

• The ·information on the Department of Education .contained in the brief·ing paper ·has been superceded by new developments this afternoon .

. The Department of Education bill was brought up on· the· Senate floor ·today and most of .the opening· statements were·· completed. However, Senator Helms introduced a surprise, unprinted amendment repealing Supreme Court jurisdiction over school prayer issues. The motion to table the amendment lost on a 43-43 tie vote. On the vote on the amendment itself, the amendment carried 47-37. We are working with Senators Byrd, Kennedy, Ribicoff, Judiciary and Government Operations committee staffs to win the vote on a motion·to reconsider. That vote will be shortly after Noon on Monday. If we are unsuccessful in that effort, it could be a fatal blow to the· ·Department of Education bill this year.

I. PURPOSE

THE WHITE HOUSE

WASHINGTON

April 5, 1978

MEETING WITH SENATOR ABRAHAM RIBICOFF Friday, April 6, 1979 9:45 a.m. ( 15 minutes) The Oval Office

From: Frank Moore

To talk to Senator Ribicoff about DNR and other subjects.

II. BACKGROUND, PARTICIPANTS & PRESS PLAN

A. General Background

(a) General

The Senator will probably want to discuss subjects other than DNR with you today, although he is aware your primary interest is in discussing the reorganization plan. He is likely to discuss MTN, trade matters and the Middle East, and may give you a progress report on the Department of Education bill.

On DNR, we have provided you a speech the Senator inserted in the Congressional Record stating his position on the issue of legislation vs. plan. We have also attached Senator Byrd's letter and a memorandum prepared by Harrison Wellford justifying your use or reorganization authority in this instance.

At the end of the briefing paper, we have added a section on Ribicoff's interest in trade matters, the Middle East and on the legislative status of the Department of Education.

B. Participants: The President, Senator Ribicoff, Secretary Andrus, Jim Mcintyre and Frank Moore

C. Press Plan: White House photo only.

III.

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TALKING POINTS

A. Opening Position - Use of Plan Only

For the past month, we have been negotiating with the Senate and House Government Operations Committees on the timing and legislative vehicle to accomplish the natural resources reorganization. Also during this time, DPS has been trying to drum up support among the timber industry.

Ribicoff continues to oppose our proposal to reorganize Interior, the Forest Service and NOAA into the Department of Natural Resources by using reorganization alone. Specifically, Ribicoff believes that our proposal is so extensive that it would have the effect of creating a new department. Reorganization authority permits the transfers of functions among departments and the renaming of departments, but not the creation of departments. Ribicoff has enlisted the support of 12 of the 17 members of his Committee, as well as Senator Byrd who has written you (attached).

We recommend you try to convince him to accept a plan. His agreement is critical because any attempt to submit our most ambitious plan over his objection would be overwhelmingly defeated on procedural grounds. Arguments you can use include:

1. One of the major campaign commitments was to reorganize the government. The Congress gav,e you this authority to meet this commitment and you want to use it.

2. Under'the best of circumstances, legislation could not be enacted until the end of the session. A plan takes 60 legislative days. It will be important to accomplish natural resources reorganization early so that the Senate can turn its attention to matters such as SALT and MTN.

3. An inevitably lengthy legislative process will cause the most program and bureaucratic disruption - at substantial costs to resource developers and users.

4. Our proposal is pure reorganization. We propose to transfer the functions and offices of Forest Service and NOAA to Interior, change its name to Natural Resources, and reorganize some internal Interior agencies. We do not propose to change the missions of programs or create or abolish functions. (A more detailed argument based

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on the Wellford memorandum would be appropriate here.)

5. As we have done with the other reorganizations, we will work very closely with his committee in fashioning the reorganization plan. Furthermore, we will provide whatever detail is necessary for his hearings so there will be a full legislative history.

B. First Fallback - "Bare Bones" Plan

Based on our conversations with Ribicoff's staff, we believe he will be unlikely to change his mind. A first fallback position would be to offer a "bare bones" plan that only transfers the Forest Service and NOAA and changes the name to Natural Resources. The other reorganizations to reform the rest of Interior would be deferred. With this option, we could lose support among those interest groups who believe Interior needs to be reformed and who question moving two efficient agencies into a less efficient Interior Department. Arguments you can use include:

1. This option responds to your objection about wholesale revamping of the organizational structure at Interior. For the most part, this option would retain the existing structure at Interior and simply add the Forest Service and NOAA as companion agencies to many of those that exist within the Department now.

2. Although the plan would be less sweeping under this option, it would accomplish my basic objectives and not subject the proposal to immense complications that are likely if we use legislation.

3. Later, additional reorganization within DNR may be necessary but those decisions would be deferred and would not be proposed without Congressional consultations.

C. Second Fallback - Plan and Legislation

Should Ribicoff refuse your request to use plan alone, a second fallback position would be to introduce both plan and legislation. While this compromise has problems, it is preferable to either forcing a plan on Ribicoff over his objections or proceeding by legislation alone.

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Ribicoff would have to agree to mark-up the legislation very quickly, and we would incorporate his mark-up in the plan we submitted to the extent possible. Ribicoff would report out the plan and the Senate would vote on the plah first. In the event of a positive vote on the plan, then the legi�lation could go forward.

The legislation would include material already in the plan, as well as additional proposals (mission, new functions, etc.). Should the Senate later amend the legislation unacceptably (e.g., hot transfer the Forest Service) you would have to veto it. Preliminary indications from Ribicoff's staff are that the Senator might accept this.

The major risk in this strategy is that other members of the Senate may be unwilling to deal with a plan on the Senate floor when legislation is pending in the committee. Thus, we would have to work with Ribicoff to gain the commitment of Byrd, Jackson, Magnuson and other key leaders to this strategy. If Ribicoff agrees to a strategy using both plan and legislation, he may insist that we convince Jack Brooks to follow the same strategy. However, Brooks has shown little enthusiasm for this dual track strategy because he believes a plan has a greater chance and we agree. You should not promise to "deliver him".

Department of Education - Status

You should thank Chairman Ribicoff for his enthusiastic support of the-Department of Education bill.

The bill came up on the Senate floor Thursday. Ribicoff and Byrd are trying hard to get a time agreement. The Republicans are stalling, hoping to delay the bill until after the recess

Middle-East

Emphasize to Senator Ribicoff the urgency of moving legislation as quickly as possible. While he is not on any of the committees handling this legislation, we should seek his help on the floor.

SENATOR ABRAHAM RIBICOFF Wife: Lois

Committees:

Administration Support:84.8%

Governmental Affairs, Chairman Finance (3) Select Committee on Ethics Joint Committee on Taxation

t•1a:cch 7, 1979

CO�GRESSIOKA.L RECORD- SENA IT

RE.-\SONS F'OR USE OF TilE :E?.EGO'- \ !..:...-\...� LEGISL..A.. TIVE PROCE:SS TO CREATE A DE?ARTME:t\"T 0? NATURAL RESOUP..CES .

� �Ir. RIBICOFE'. :Mr. President, -as chz:irm:?.:t of the Co::nmittee o!:l Govern-· mental .-\IT?.irs, I should like to state my >iev.-s regarding .. the administration's p:ropo.sal to create a new Department of Nat=.l Resources.

The Reorganization-Act of 1977 ·pro�· hibits ��e use of reoFganizaticn plans to create n'ew executive depa;:-" ... "!lent.s. Legal

· questions aside, it is my belief that li!rgescale . cabL'1et-level reorganizations. which involve major policy. and organizational shifts, are too complicated subst2iltivel7 ar:d politically to be handled through the Reorganization Act authority. ·· .· . . .

Last week. the ad.mitistration proposed � · t..l'le establishment of a new Depart.'-!lent �

of Katur:al P.esources by use of Reorgaci- ·l zaticin Act authority. Such a department would .be res;>onsible for the Nation's j ocear.ic, atmospheric, and pu":llic la.."1d . programs. includ.ir.g timber, atmospheric, 2-l.!d public la:J.d progra...."'lS, includ.bg timber, wildlife, mineral and energy re-

·

sources. In thase vital area.S, it will be · asked to make difficult, complex decisions in balancing the competing clai.:r.s .for the use of public resources. Fo:- this reason. every document supplied to the Congress by t.."le OMB Reorga:n:Zation Task Force has stressed "the necessii:.Y of. accompanying n:ltural resource consolida� tion wit...'1. a strong and clear statement of mission for the- new- Department. Thus, t..'le o:-.rn stated:

0'-.:.r natu..-al he::-lta;;e in�ol>es a. ..-!ta.l. con• tinul!lg and !nter:-elated pon!on or the t-:Jtal p�b!:c i�te!'es-:, "a:"'!"'a:lt:!:!g ces.tiO::l o! a Cabinet de?��:::1e�t to ass�re t�e 1-:e:;- polic; a::d ma�age!:!le:!t to� natu!"al :resot:rces. The est.abll.s!:me:lt o! a clesr st.at.eoent o!. ::::1lssiO!l a::1d !:::a::ldate Ul the ;:e-;; Departmen: is a key cleme.:1t of th!.s option.

·I believe the Congress should express itself very clearly and forcefully regard· i;:-,g t!:e n:ission and purpose of a new D:�. bt:: no such st3tement of :ni.ssic:l c::.:-:. 1e;:3.�ly be i.ucluded L.� a reo:-banizatic:1 p!an. Thus. u:-!der t�e aC!:'linistrat:o:1·s pro;:>csal, the Natio:J "·ouid end 'LiP �.;·it:'1 a s��gle. co::..sclida�ed natural resoucce.; ce;:>a.rt:7lent that had no leg:isla-

� ti\·e guid2.nce or Ci:-ectiori ns tO p�oiiti� c: t�1e bs.1::.r.ci:::g o: co:::pe:ir�s interests.

· ··. , '

Flrrth'=:, ·i:-1 o:-de:- to 2cco�p:.ish the . . ·.1

Ir.issio>1s that will be assi§;ne-:! to the new departme:1t, the ac'.mi.t."lis

The Presiden t The L'hi te House Washington, D.C.

Dear Mr. Presi�ent:

·· f·�arch 12, 1S79

I am Hriting to express my oppos1t1on toyour intention to create a new Department of Na tural Resources by a reorganiz2 tion plan. · I urge you to submit your proposals for such a department to the require�ents of the normal legislati v e process .

The Reorganization Act authority on which you rely pefmits rear- ' ga11ization plans which change the name of a department and transfer . functions f1·om one department to another . Since 1964, statutory.· res tr i c tion s \'t'ritten into rene\-Jals of the Reorganizat-ion Act have prohibited l"eOl·ganization plans which "provide for" or '!have the . · • . · effect of" creating new cabinet departments. Congress has repeatedly ffiade it .clear that major reorganizations of executive departments must be h and led through the full legislative process . -•

I have not reached any .judg::m·ent about the merits of the proposed reorganization, I am fami l iar- enough with�the scope of the proposal to believe that proceeding by reorganization plan Hould violate the spirit, if not the letter, of the Reorganization Act. ProposalS-for a Department of; Natural Resources have a(;, long his tory,: an,d they have excited support and aroused opposition precisely because _they represented a major d epa rtur e from our current.approach to resource manage� ment, · Transferring major agencies like the Forest Service, Hhich ihcludes 26 per�ent of the employees of the Department nf Agriculture, and the National Oceanit and A tmosp heric Administration, which compl·i se� 43 pel'Ce�t of the Co;;:merce Department, are the eannarks of a major reorganization. The goal of the reorganization -- the creation of one deparbnent with the mission and the power needed to manage our precious natural resources in a cor,,prehensive and far- sighted v;ay -- plainly indicates that a nc:w department is envisioned.

'·-.� ., - '

; . . - �- - � l 2 � c -; c , '.�I \....-, I , ) l _.,I ---:

The Reorg2niz2tio� Act, of cou rs � , p1ac�s strict time limits on Concress and ultimately permits Congress only an up or down vote

·

en the plan submitted. For this re a so n, proceed�ng by plan precludes the kind of study and amendment, refinement ·and co�promise that follows from full Congressional consider�tion. The process and its limits c.re v:ell-suited to minor transfers within the · Execut i ve Branch. However, i n a major reorganization, proceeding by plan improper ly transfers v;hat are essentially legislative fur,ctions and responsibilities from Congress to the \�hite House.

Moreover, a new department created b; r2organization pl�n is destined to be inadequate. Presur..ably, the ,t..dministration seeks this reor- . . ganization because �ur current approach to resource management evolved piecelileal over tilile," and the agencies al·e hampered by mandates wh i ch

··are overlapping or irreconcilable. · A reor gan i zation plan cann ot ·

i n clu de a statement of mission for t he department. It cannot spell out the po· .. 1ers \vhich the Secretary must have to pull together a

. d2partment comprised of agencies which have traditionally been in- . dependent and sornetimes antagonistic. These and other issues essential

t to the department's success can only be addressed thro�gh l e g i slation .

ihe A�ministration may believe that proceeding by plan affords th� . best chance of success. This conclusion seems highly questionable,

at best . . Proceeding i n this fashion gives Senators a re ason to oppose the proposal, regardless of i ts merits. There is one oth�r unfortunate po 1 it i ca 1 consequence: Supporters of the status � wi 11 fight the idea r egardless of its format, �ut the chance to rally the s0pport of those who might be enthus i ast i c , could be lost if the effort is portrayed as a major reorganization, to be brought about:·by plc.n rather than the nonr.al .. legi sl ati ve process. · - .-\ ,. :' :,: -�:-� . . . ,• :• .. ·-,• .· · For oll these reasons, I urge y�u tf'·econs i der this ma

.tte:. . ·.

·.

S1nc/r .y yours, . . � .

, . · · .•• · ��-i �/cJ;-yL · · .. · ..

Robert C. Byrd

•.

RCB:is

. :. _ ......

····· "':·

-� -._ :_ . . r:::.�:.-. - · ' nA�-t·:::.-::. t·.::_:_:_:_:

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c:_,_,_, f ..... . ······ �-· I r-:_:_:_:.: •· ' .

EXECUTIVE OFFICE OF THE PRESIDENT

OFFICE OF MANAGEMENT AND BUDGET

WASHINGTON, D.C. 20503

April 5, 1979

TALKING POINTS FOR YOUR MEETING WITH SENATOR RIBICOFF -USE OF REORGANIZATION PLAN v. LEGISLATION

FOR NATURAL RESOURCES REORGANIZATION -LEGISLATIVE HISTORY AND LEGAL POINTS

We propose to accomplish three things in DNR:

Change the name;

Transfer NOAA and the Forest Service; and

Reorganize other parts of Interior.

Reorganization authority speaks to each explicitly:

"change . . . the name of a [department] affected by a reorganization" -- 5 U. S. C. 904;

"transfer . . . the whole . . . of an agency [such as Forest Service] -- 5 U. S. C. 903; and

consolidate "a part of an agency . with another part of the same agency" - - 5 u.s.c. 903.

The statute (5 U. S. C. 905) prohibits a reorganization plan which "would have the effect of creating

• . • a new department" -- our position is that "new" means "additional" department, such as Energy. Senator Ribicoff has himself used it in this context (see attached colloquy with Lance on Reorganization Act) .

In 1977, when present Reorganization Act was passed, no legislative history has been found discussing the substance of this provision, other than Ribicoff's colloquy with Lance, above.

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The prohibition against a "new" department was added to the reorganization legislation in 1963. The recorded debates on this point in 1963, occurred in the House, not the Senate. Congressman Brooks and others who were in the House then and now strongly support our view that "new department" has its plain English meaning, i.e. an additional department which had not previously existed.

Department of Justice has given a written opinion that a plan is legally permissible for the proposed Natural Resources reorganization (copy of opinion attached). Pages 7 and 8 of that opinion contain excerpts from the House debate.

Comptroller Staats' letter to Ribicoff of February 6, 1979 (copy attached) states:

[The Department of Natural Resources plan] "is fully consistent with the present mission of the Department of the Interior, whose functions remain the core component of the expanded Department • . • • " ; and

" . . . [The] legislative process is frequently a slow one • . . · I am therefore also sympathetic to the Administration's desire to make a start on achieving some long overdue changes . . . . I would regard the proposed plans as a beginning, but would rely on Congressional initiative to refine through legislation the mission and administrative structure . . . . "

In other words, the Comptroller General himself, in response to Ribicoff's question, implies that a reorganization plan could be used for the changes, but that Congress could "refine" the department later through legislation.

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OUR ARGUMENTS

The plain words of the statute prohibit only a "new" department, not transfers into an existing one.

The Comptroller General himself seems to assume tha� the proposed plan is a legally permi�sible "beginning", and concedes that the functions to be transferred to Interior (NOAA and Forest Service) are "fully consistent" with present Interior functions.

•The Congressional debates indicate that it is the creation of a new department, not transferring existing units that is prohibited. Senator Ribicoff's own example (Energy) supports this. construction.

The Reorganization Act (Sections 901 and 903, copy attached) requires you as President, when you find that duplication and inefficiency exist, to submit a reorganization plan to Congress. Senator Ribicoff� himself has supported the substance of a Natural Resources Department in the past (but through legislation). Senator Ribicoff should give the Senate a chance to express its views on th� substance of these matters, as the Reorganizat�on Act provides.

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RIBICOFF'S ARGUMENTS

Large-scale cabinet-level reorganizations, which involve maj or policy and organizational

· shifts are "too complicated substantively and politically" to be handled by reorganization plan.

Massive -internal changes in a cabinet department should be made by legislation.

The prohibition against a "new" department "was in response to President-Kennedy's abortive reorganization plan to create

. . " a Hous1ng department.

RESPONSE

We propose primarily two changes, transferring NOAA and the Forest Service. Both duplicate or complement existing Interior functions; in fact, both once had many of their functions located within Interior.

We propose modernizing the Interior structure, but would consult closely with Ribicoff on all details if he likes.

But HUD, like Energy and Education are additional departments.

__ __j

.AJ lq71 c .......

TO RENEW THE REORGANIZATION AUTHORITY

u.s. c� ..... �"· ft I .,. •

CJu�,,_.._.��ia�ot. v{ 6{ \,77.1

HEARING BEFORE THE

COMMITTEE ON

GOVERNMENT OPERATIONS

UNITED STATES SENATE NIXETY-FIFTH COXGRESS

FIRST SESSIO.S

ON

s. 626�f( TO ESTAllLISll THE PERIOD WITHIX WHICH TH,E PRES!· DEXT MAY TRA!\S)IIT '1.'0 THE COXGRESS PLA .. "';S FOR THE REORGA!\IZATIOX OF AGEXClES OF THE EXECUTIVE

BRA!\CH OF THE GOYER.NME;'I."T, AND FOR OTHER PURPOSES

FEBRUARY @, 1977

Printed for the use ot the Committee on Gol"ern.ment Operations

U.S. GO\.ERJSMEJST PRJNTJJSG OFFICE W ASHJNGTON : 18TT

23

Again, I cannot be specific in this instance, but I am sure there are a lot of pro�ams in Government that are out of date, and when you measure agamst zero-based budgeting, against Government reorgamzation, against sunset legislation, that they are no longer serving your purpose. I think something ought to be done about them.

Senator ALLEN. Is it possible to have greater efficiency with fewer employees and at less expense f

:Mr. LANCE. Yes, sir, !think so. When you start talking about less expense, it depends in whether

you are talh.-in:; -�-. � �;.g �-:�:� ., � .. i ... 'j.:··�

24

Senator Au.Ex. The efforts, the powers, the authority. and powers to re,trUlate, would additional burdens be placed upon the citizens of our Nation or upon the taxpayers with the reorganizational plan!

:Mr. LAXCE. No, sir, I would hope we are moving in the other direction. that we are not crn the President has said something to this effect, and possibly this is n little afi

ASSISTANT ATTORNEY GENERAL OFFICE OF LEGAL COUNSEL

lnUrb itatrs ilrpartmrnt nf Justtrr ltas�ingtnti. II. ar. 20530

Mr. F. T. Davis, Jr. General Counsel President's Reorganization Project Office of Management and Budget Washington, D. C. 20503

Dear Mr. Davis:

2 8 fi!;!":'' 1979 ''•· ••\ I

This responds to your letter of March 14, 1979, asking us to evaluate the legality, under the Reorganization Act of 1977, of OMB's proposal to rename and add functions to the Department of the Interior. We understand that the reorganization proposal would:

(1) Transfer to the Department of the Interior

(a) all functions of the Secretary of Commerce authorized by the Endangered Species Act of 1973, as amended, 16 u.s.c. §§ 1531 et �;

(b) all functions of the Secretary of Commerce authorized by 33 u.s.c. §§ 883a, 883b relating to the Coast and Geodetic Survey;

(c) from the Department of Commerce all functions of the National Oceanic and Atmospheric Administration (NOAA);

(d) from the Department of Agriculture all functions of the United States Forest Service; and

(2) Rename the Department of the Interior the Department of Natural Resources (and conform the titles of personnel within the Department to the new name).

I

The proposalzaises three questions under the Reorganization Act of 1977 ("Act"): !/

(1) whether the Act permits a reorganization plan to change the name of an executive department;

(2) whether the proposed transfers are permissible under the Act;

(3) whether the proposal as a whole has "the effect of • • • creating a new executive department," in violation of 5 u.s.c. § 905(a)(l).

We conclude that, upon the facts stated above, the proposal is lawful under the Act. While the authority of the President to reorganize existing executive departments is not without limits, we believe that the proposed reorganization is well within these limits.

Name Change

Section 904 of title 5 provides: "A reorganization plan transmitted by the President • • • may change, in such cases as the President considers necessary, the name of an agency affected by a reorganization • • • • " "Agency" is defined by the Act to include "an Executive agency" (5 u.s.c. § 902(1)), and "Executive agency" is defined elsewhere in the title to include "an Executive department." 5 u.s.c. § 105. Thus, the proposed name change for the Department of the Interior would be authorized by the Act. This conclusion is strengthened by the fact that the Reorganization . Act of 1949 deleted a provision found in the Reorganization

·Acts of 1939 and 1945 that prohibited a reorganization plan from "changing the name of an executive department." 2/ Reorganization Acts after the 1949 Act have not revived the prohibition against name changes.

11 Pub. L. No. 95-17, 91 Stat. 29 (1977), codified at 5 u.s.c. §§ 901-912.

!/ Compare Reorganization Act of 1939, Pub. L. No. 76-19, § 3(c), 53 Stat. 561, 562 and Reorganization Act of 1945, Pub. L. No. 79-263, § 5(a), 59 Stat. 613, 615 with Reorganization Act of 1949, Pub. L. No. 81-109, § 5(a), 63 Stat. 203, 205.

2

•

Transfer of Functions

We find the proposed transfers outlined above unobjectionable. The central .purpose of the Reorganization Act, as made explicit in 5 u.s.c. § 901, is to achieve economy and �efficiency in the executive branch by consolidating and coordinating agencies and functions with similar purposes and by eliminating overlapping and duplicative structures of government. 3/ The transfers to Interior appear to fulfill this purpose by consolidating in one department functions concerning natural resource use and conservation now scattered through various departments and agencies. The Interior Department has been involved in similar reorganizations in the past • . Reorganization Plan No. II of 1939 4/ transferred to the Department the functions of the National Bituminous Coal Commission, the Bureau of Insular Affairs of the War Department, the Bureau of Fisheries of the Commerce Department and the Bureau of Biological Survey of the Agriculture Department. 2/

3/ See H. Rep. No. 105, 95th Cong., 1st Sess. 4 (1977) (quoting Report of the House Committee on Expenditures in the Executive Departments on the Reorganization Act of 1949):

There is an ever-present need for making such change in the organization of executive agencies as will make the executive branch of the Government more manageable, _promote better coordination in the development and execution of Government programs by removing sources of confusion encountered by a citizen in dealing with scattered and overlapping agencies and facilities the conduct of his business with the Government, and otherwise promote efficiency and economy.

4/ Reprinted at 5 u.s.c. App. p. 710 (1976 ed.).

5/ Compare Reorganization Plan No. 4 of 1970, reprinted at 5 u.s.c. App. p. 832 (1976 ed.), which established NOAA in the Department of Commerce by consolidating functions relating to commercial fisheries, marine minerals, and .. _ hydrographic surveying previously located in Interior, the Department of Defense, and the National Science Foundation •.

3

Establishment of a New Executive Department

Section 905(a) of title 5 provides:

A reorganization plan may not ,provide fo� and a reorganization under this chapter may not have the effect of --

(1) creating arew Executive department • • • •

We conclude that, as the proposed plan has been presented to us, it comports with the requirements of the Act and does not violate this provision. The prohibition against the creation of new executive departments has had a checkered history in the Reorganization Acts. The 1939 Reorganization bill as introduced in the House did not prohibit in explicit terms the creation of an executive department, although its sponsors asserted that such action was barred by the bill. On the floor of the House, Representative Ludlow proposed making the prohibition explicit in order to "make it absolutely clear to everybody in this House that there is no intention of establishing any new department. It would relieve the bill altogether of its ambiguity in respect to the determination of Congress that no new departments shall be creat;ed • • • • " §_/ Representative Warren, the floor manager, responded that "this bill specifically provides that no new department of the Government may be created. In order to absolutely clarify that, if there is any possible doubt, I will say that we will very gladly accept the amendment • • • • " Zl Accordingly, the bill, as enacted, provided "[n]o reorganization plan • • • shall provide • • • for the establishment of any new executive department." 81

The 1945 Act renewed the prohibition and added new language. It provided:

�I 84 Cong. Rec. 2413 (1939).

II g.

!I Pub. L. No. 76-19, § 3(a), 53 Stat. 561 (1939).

4

No reorganization plan shall provide for, and no reorganization under this Act shall have the effect of

ment (1) • • •

• • • establishing any new executive depart• (emphasis supplied).

The addition of the "shall have the effect" language resulted from the combination of two similar sections i/ of the 1939 Act. 10/

In 1949, Congress deleted the prohibition against the creation of a new executive department. The proponents of the bill, relying upon the views of ex-President Hoover and the report of the Hoover Commission, argued that the restrict�on was unnecessary because the Act already forbade the President from creating new functions. 11/ Since creation of an executive department could only occur by consolidating existing programs and offices, it seemed no different than other types of reorganizations permissible under the Act. They pointed out that the Federal Security Agency, which had been created by a reorganization plan, was a department in everything but name and argued that the President should have the flexibility to evaluate it to departmental status. Although these arguments did not prevail in the House (which

, amended the Administration bill to include the deleted _ prohibition), the Senate bill gave the President the authority to create an executive department. In the ensuing conference,

i/ Id. §§ 3, 6.

10/ See s. Rep. No. 638, 79th Cong., 1st Sess. 8 (1945).

11/ See Reorganization of Governmental Agencies: Hearings on H.R. 1569 Before the House Committee on Expenditures in the Executive Departments, 88th Cong., 1st Sess. 18 (1949) (statement of Frederick Lawton); id. at 141 (statement of President Hoover)("[The bill] requires the President to build whatever he builds out of existing timber. It does not give him new timber to build anything with; no new functions in the Government.")

5

the Senate version was adopted. 12/

The new authority to establish an executive department was used by President Eisenhower to designate the Federal Security Agency the Department of Health, Education and Welfare. 13/ The Reorganization Act of 1949 was extended in 1953, 1955, 1957 and 1961 without altering the authority of the President to create a new executive department.

The Reorganization Act of 1964 14/, however, reinstated the prohibition against the creation of new executive departments. The dispute concerning the proper reach of the President's reorganization power had its roots in substantive political concerns. In 1961, the Kennedy Administration submitted a bill to Congress providing for the establishment of a Department of Urban Affairs and Housing (DUAH). The bill was reported out of the House Committee on Government Operations but was never granted a rule by the House Rules Committee. To break the log jam, the President transmitted to Congress Reorganization Plan No. 1 of 1962, proposing creation of DUAH by reorganization. The plan failed when it was rejected by the liouse.

12/ The House conferees rationalized acceding to the Senate by pointing out that under the Conference bill a reorganization would not go into effect if disapproved by a constitutional majority of either house. (The 1945 Act required passage of a concurrent resolution by both houses for disapproval.) Thus, explained Representative Holifield, "[y]ou give [the President] with the one hand but you take away more from him with the other." 95 Oong. Rec. 7839 (1949).

13/ Reorganization Plan No. 1 of 1953, reprinted at 5 u.s.c. App. p. 762 (1976 ed.) The Plan was transmitted to Congress on March 12, 1953. To expedite initiation of the Plan, the Senate and House adopted a joint resolution which made the reorganization effective as of April 11. In 1963, proponents of limiting the President's power to create new departments· pointed to the joint resolution to demonstrate that HEW was created by "organic law" to support their argument that no new department had ever been created under the President's reorganization power. � 109 Cong. Rec. 10070 (1968) (Rep. Anderson).

lif Pub. L.No. 88-351, 78 Stat. 240 {1964).

6

When the Reorganization Act came up for renewal in 1963, opponents of the proposed DUAH and other Congressmen concerned with increasing Presidential prerogatives proposed a ''clarifying" amendment that would explicitly prohibit the creation of a new executive department by reorganization. The supporters of the amendment asserted that it only spelled out more precisely what the bill already prohibited; they argued that since the bill did not permit the President to create new functions, he could not have the authority to establish an executive department. It was said:

We are merely bringing into the act the internal consistency that ought to be there when we amend it along the lines suggested. I do not think it is possible to have it both ways. We cannot, as we say in one section of this act, have a bar or a prohibition against the creation of new functions by virtue of a reorganization plan - and at the same time permit the creation of a new department. I submit that those two concepts are entirely inconsistent. Therefore, this would be in a sense a clarifying amendment. 15/

To these members of Congress, �eation of an executive department was a matter of substance even if the proposed reorganization merely consolidated existing agencies. 16/ As Representative Anderson stated:

The issue is a simple one. Is the creation of a new executive department sufficiently important to warrant the Congress reserving the right to determine the department's structure, its functions, the number of under secretaries, assistant secretaries, their compensation, duties and so forth?

15/ 109 Cong. Rec. 10070 (1963)(Rep. Anderson).·

16/ See 109 Cong. Rec. 10062 (1963)(Rep. Brown)(creating new department is a change "in the basic structure of the federal Government.").

7

Or must these matters be determined in their entirety by the executive branch without the right of the Congress to amend or modify them?

Creating a new executive department is an important substantive step in the development of the executive branch� It is important enough to dictate the employment of the full legislative process. Surely, the Congress in 1949 when the Reorganization Act was first enacted must have assigned a special role to the status of the executive departments because the act contained a prohibition against use of a reorganization plan to abolish an executive department, or to consolidatetwo existing departments.

The amendment that will be offered not only preserves but strengthens this special regard which the Congress for many years - and the administration - has consigned to the status of executive departments. 17/

Opponents of the amendment, adopting President Hoover's statements of 1949, argued that the President should retain the flexibility to create an executive department by simple reorganization. They contended that the power to reorganize did not include the power to create new functions and that a new department could only be created from existing entities. 18/ The bill, to them, represented no derogation of·Congress' legislative function.

. The House adopted the amendment proposed, and the Senate approved the House bill without discussion of the reactivated limitation on the President's authority. Congress renewed the President's reorganization authority in 1965, 1969, 1971 and 1977 without altering the restriction.

17/ 109 Cong. Rec. 10071 (1963). See H. Rep. No. 311, 88th Cong., 1st Sess. 18-19 (1963)(Additional Views of Representatives Brown, Anderson and Horton).

1�/ See 109 Cong. Rec. 10066 (1963)(Rep. Holifield)("Creating an executive department is not creating new functions, merely co�bining or integrating existing functions and agencies."); id. at 10069 (Rep. Rosenthal); H. Rep. No. 311, 88th Cong., 1st Sess. 4-5 (1963).

8

It cannot be disputed that the statute does not permit the creation of an additional executive department� This is so even though �stablishment of a new department could not include the creation of new programs or functions� Although the President may create complex agencies with a variety of functions (if Congress does not disapprove), the addition of an executive department is deemed to be of such importance that it must be accomplished through normal legislative channels.

What is less clear are the limits on the authority of the President to distribute existing functions and agencies among existing departments. It is black letter law that all parts of a statute must be given effect if possible. Thus the language prohibiting reorganizations which "have the effect •

.• • creating a new department" must be read to for

bid reorganizatiombeyond those that create additional departments. At some extreme point, as a result of a wholesale transfer of functions, a department might take on an appearance and purpose so distinct from the mission it was given at its creation as to be considered a "new department" for purposes of the Act. The legislative history of the Act evidences Congress' belief that departments are qualitatively different from other executive agencies, 19/ and thus places limitations on the President's power to alter existing departments. Of course, as a practical matter, the procedures under the Reorganization Act ensure that Congress can express its opinion on the legitimacy of the President's proposal and that that opinion will be final.

Admittedly there is much gray area between the simple transfer of functions and a total change of mission which could "have the effect of • • • creating a new department."

19/ This is also evident in that the Act prohibits the merging of two departments but permits the merging of two agencies. Compare 5 u.s.c. § 905(a)(l) with id. § 903(a).

9

We believe that the appropri�te line-drawing may be accomplished by focusing on the major purposes and missions of the department as established by law and analyzing whether the functions transferred into the department complement and/or supplement these purposes or missions. 20/

Applying these general principles to the facts .as we understand them, we find the proposed reorganization well within the limits of the law.

The Department of the Interior is currently charged with conservation and management of mineral, animal, plant and water resources. Its major constituent parts include the Bureau of the Mines, the Ocean Mining Administration, the United States Geological Survey, the United States Fish and Wildlife Service, the National Park Service, the Bureau of Indian Affairs, the Bureau of Reclamation, the Bureau of Land Management, and the Office of Water Research and Technology. It is thus clear that analysis, preservation, and management of natural resources is the central mission of the Department. The proposed reorganization furthers this mission.

(1) Transfer of NOAA

NOAA, established by Reorganization Plan No. 4 of 1970, was endowed with the functions of the Bureau of Commercial Fisheries and other functions relating to the marine species and minerals by transfer from Interior. It was placed in the Commerce Department primarily because its largest component, the Environmental Science Service Administration, was located there. See Message of the President, July 9, 1970, reprinted� 5 u.s.c. App. p. 829. NOAA's mandate is to "improve our understanding of the resources of the sea, and permit their development and use while guarding against the

20/ It should be noted that the relative ease with which Congress may disapprove a plan militates in favor of broad authority for the President to rearrange existing programs and structures, both as a practical matter and as a factor in statutory construction.

10

sort of thoughtless expolitation that in the past laid waste to so many of our precious natural assets." Id. at 832. The transfer of NOAA to the Interior Department appears to further the core purposes of that Department and to complement its existing components charged with the study of natural resources and phenomena.

(2) Transfer of other functions of the Secretary of Commerce

Under the Endangered Species Act, the Secretary of Commerce must identify endangered and threatened species "[w]ith respect to any species over which program responsibilities have been vested in the Secretary of Commerce pursuant to Reorganization Plan No. 4 of 1970 [which established. NOAA]. •• 16·u.s.c. § 1533(a)(2). Under Reorganization Plan No. 2 of 1965, responsibility for preparation of the Coas_t and Geodetic Survey and other analyses under 33 u.s.c. §§ 883a and 883b was vested in the Secretary of Commerce, and the Coast and Geodetic Survey was merged into the new Environmental Science Services Administration. This Administration was abolished by Reorganization Plan No. 4 of 1970 and its functions were transferred to NOAA. Thus a complete transfer of NOAA to the Interior Department requires transfer of these functions now vested in the Secretary of Commerce.

(2) Transfer of the Forest Service

Management of federal forests was originally vested in the Department of the Interior. Control of the forest preserves was transferred to the Department of Agriculture in 1905 in order to-consolidate various forestry programs. � H. Rep. No. 48, 58th Cong., 2d Sess. (1903). The Forest Service currently manages national forests and regulates logging, mining and recreation activities thereon. The return of the control of national forests to the Department of the Interior appears entirely consistent.with the mandate of that Department.

11

..

In sum, we believe that the proposed reorganization does not exceed the limits placed on the President by the Reorganization Act. The planned transfers should not be deemed to have the effect of creating a new department. The central purposes and missions of the Interior Department remain and appear to be strengthened by the reorganization. 21/

M. Harmon istant Attorney General

•

fice of Legal Counsel

21/ We note that your draft proposal leaves blank the part on transferred positions and further note that Senator Ribicoff objects to the proposal partially on the ground that it will lead to the creation of a new management structure within the Department. Without the specifics of these planned structural changes, we cannot opine on the question of whether they have "the effect" of creating a new department. Of course, the Reorganization Act, to be an effective tool for ending redundancy and inefficiency in the executive branch, must permit a fair amount of flexibility in altering the operational structure of affected departments.

12

COMPTROLLER GENERAL OF THE UNIT£0 STATES

WASHINGTON. C.C. 205

B-194028

create a successful department �ithin the time-frame allowed for examination of a reorganization plan. Moreover, the Academy points out, a ne� Department should have an organic charter and legislative mandate. · Its mission and functions should reflect congressional policies and objectives, arrived at through the process of legislative negotiation and compromise ��th the Executive Branch.

I agree completely with all these points. There is much in the two plans, as p resently written, that raise questions of managerial feasibility, and, as I mentioned earlier, the implementation omissions are of equal concern. Moreover, the effect on two existing Departments - Agriculture and Commerce � which will lose major functions has not been satisfactorily addressed. I am sure that the Congress will wish to consider a number of the problems raised by the Academy and others about the way these two new Departments should operate during the course of this legislative session, even if the plans are not disapproved. However, the legislative process is frequently a slow one, in view of competing priorities and other public pressures. I am therefore also sympathetic to the Administration's desire to make a start on achieving some long over-due changes in the way services are delivered to the public in these two important areas. I would regard the proposed plans as a beginning, but would rely on congressional initiative to.refirie through legislation the mission and administrative structure of the proposed new departments.

Comptroller-General of the United States

2

TC:

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202 659-9165 �

JantJEry 17, 1979

L:.S. Senate C oTt,ittee on Governmental Affairs

The National Academy of Public Administration Ad Hoc Panel on Natural Resources Reorganization (Alan Dean; Paul Dembling; Dwight Ink; Harold Seidman)

SUBJECT: Panel Findings on the Proposed Plan for a Department of Natural Resources

Whether or not the Administration can justify legally the use of a reorganizati on pl an in this instance, it is the belief of the Panel that a nev.• Department of Natural Resources can best be established by legislation. We feel that the Congress should establish, by law, the policies and objectives for the new department as a part of the process of creating it and that should accompany the department into existence. The main reason for these views is summarized below. Brief backgrounds of the p anel members are appended to the summary.

The members of the Panel are strong supporters of a Department of Natural Resources, but we feel that its success or failure may depend upon the approach taken in bringing about the reorganization. Our beliefs are based on experience with the reorganization plans in the seven previous administrati ons and an examination of the proposed reorganization plan for the Department of Natural Resources.

1. It is essentiai to obtain the partnershiP and understandinq of Conoress in this �ajar restructurina of executive departme�ts, because there are significant policy as well as management implications.

o It is impossible to get the degree of congressional intervention and consideration necessary to create a successful deJartment within the time-frame allowed for the examination sf a re organization plan

o 1-.n "all-or-nothing'' situation exists for the approval or rejection of the plan

J

Jan:.:c.ry i i, 1579

J.:.7fa irs

o The method and mode of a plan's transmittal do not allow for any compromise or give-and-take on the contents of the proposal

2. An executive deoartment cannot be created satisfactorily (includin a r,e\·: chal·ter and a statement of policy by a reorganizc:tion plan.

o Only through legislation can the broad policy goals and objectives be articulated which should guide the approach to managing and organizing the operating elements of the Department

o The existing Department of Interior has no organic charter and has suffered as a consequence

o txisting Agencies must be brought into a new Department of Natural Resources (Forest Service, for example ) , but that requires a wellarticulated departmental policy

o Legislation is necessary to develop an organizational and operational framework, or else the department becomes a "holding company" for autonomous bureaus

o A plan could create an administrative and managerial n·ightmare for the Secretary if he is unable to control subordinates; e.g., HEW's lack of capacity to manage the Office of Education

o Its process does not allow the effective legislative compromises and negotiation between:

houses of Congress; the executive and legislative branches

o It will be difficult to convince agencies and constituencies outside of the present Interior Department (such as Forest Service and elements of the Corps of Engineers ) that they will become part of a viable executive department with a fresh approach if a reorganization plan i� used

o Mandates and requirements for specific reports to Congress must be expressed in law ·

o The new operating elements must be made part of some overall management and operating strategy and this requires the creation of a genuinely new department not a renamed Department of the Interior

·

o Unless adequate managerial functions are vested in the Secretary, the department \'>'ill remain difficult or impossible to manage effectively

o Mission and need should dictate the initial organization of the department. An incremental approach to the reorganization of natural resources functions is undesirable and may be difficult tc brin9 a�out

•

l

!

I I

.::anucr_v 17. 1979

r;c�:- _ 70: U.S. Senate Com11ittee: on Governmental Affairs

o The ne\'l department needs necessary statutory authority in some special areas

o The administrative a rrangements and field structures are often provided for in law

o Presidential succession of the Secretary can only be prescribed through law

3. Proceeding by reorganization plan raises serious political problems while producing few benefits.

o An old department, such as Interior, needs to be seen as being replaced by a genuinely new, strong, and well-endowed department to win support

o It undermines the case for a new departrrent if the old traditions and bureaucratic practices are expected to continue

o The use of a reorganization plan increases the-rikelihood of congressional rejection of the nev1 department

o The use of a reorganization plan will shift attention from substance -to process

o Proceeding by plan will inevitably produce a legislative history which would stand in the way of achieving the full benefits desired from a Department of Natural Resources

. ! � i

• _ .. :· ''?-" ...... _. "" -. ----- -----. --�--- -----------' ....... ------

23

OVSB&IGBT FINDING&

No oversight findings and recommendations were made in&&Dluch u this legialation has been inoperable since Aprill, 1973.

N.w BUDGBT AVTBOJUTY AND TAX ExPBHDlTVBBS

No new budget authority or tax expenditures are required by this Jesielation.

CJUHGM IN ExisTING L\w MADB BY TIDD BILL, As REPOBTBD

In compliance with clause � of �ul.e XIII of the Rules of t�e House of Representatives, changes m extstmg law made by the b1ll, as reported, are shown as follows (existing la� p�pose� t

THE SPECIAL REPRESENTATIVE FOR TRADE NEGOTIATIONS

WASHINGTON

20506

April 5, 1979

MEMORANDUM TO THE PRESIDENT

FROM: Robert S. Strauss ��A(' RE: ' Your meeting with ��; Ribicoff

BACKGROUND

Senator Ribicoff has been very helpful and constructive throughout the negotiation of the trade agreements and in our consultations with the Finance Committee, where he chairs the Trade Subcommittee. However, on Wednesday he threatened to remove himself as floor leader for the package because of one issue (wine gallon assessment, noted below); and he might yet assert linkage between the MTN and his proposal for a separate Department of Trade.

Wine Gallon: We have agreed to end a 110-year practice of assessing excise taxes on bottled distilled spirit imports as thou.gh the contents were 100 proof, even though they usually are less than that; whereas imported bulk spirits and domestic bulk and bottled are taxed strictly on the alcoholic content. This practice has rankled trading partners for many years, and consequently was of great trading value. The Europeans treat grain-based spirits as an agricultural product, so we traded a conversion to all proofgallon assessment for many agricultural concessions, chief of which was tobacco. U.S. distillers who do not also import have waged a strong and sometimes nasty campaign to have the Congress block our agreed conversion. Heublein, located in Connecticut has been on the front edge of this, and has gotten Ribicoff to a point of high concern.

- 2 -

The wine gallon conversion is the key to agriculture, which is the key to the MTN;

There is a revenue loss involved, but .this is true of almost every trade liberalization step;

We also have-secured trade practice concessions for the distilled spirit industry so they will be able to sell abroad, where some markets have been extremely difficult in the past;

We are examining a possible change in the date of collection of the excise taxes, which currently is to the disadvantage of the domestic. distillers;

Senator Ribicoff surely cannot let this issue keep him from managing the trade package on the floor, when he knows it so well and is so closely identified with it.

Department of Trade: Senators Ribicoff and Roth have one bill in for such a department, Robert Byrd has another, and there appears very strong support for this concept in the Senate. The Senate Finance Committee has voted in favor of a Department of Trade in connection with their review of the MTN.

The idea of consolidating many or all trade functions:.in a single agency has appeal, and has been the subject of a reorganization study; there is a task force working on this under OMB direction;

The task force will look at your bill as part of its study, and will report to me within a month or so with recommendations;

Since there. may be several versions introduced in the Congress, we should look at them all and the Congress should weigh them all;

This process should not delay in any way Congressional action on the MTN, even though it is in some way complementary.

EYES ONLY

THE CHAIRMAN OF.tHE

COUNCIL OF ECONOMIC ADVISERS

WASHINGTON

April 5, 1979

MEMORANDUM FOR THE PRESIDENT . l s· f)

From: Charlie Schultze L I-� lr 'J / Subject: Employment and Unemployment in March

Tomorrow (Friday, April 6) at 9:00 a.m., the Bureau of Labor Statistics will release the figures on employment and unemployment in.March. Employment rose by 195,000; the unemployment rate was unchanged at 5.7 percent.

Among whites, the unemployment rate inched up from 4.9 percent in February to 5.0 percent in March; the rate for whites has hovered around 5 percent since October. For blacks, the unemployment rate in March dropped back to 11.2 percent (the January level) from 11.9 percent in February. On average, the rate for blacks has been about 11-1/2 percent since October. More generally, unemployment rates over the past half year have been relatively stable for all major groups in the labor force.

The March employment increase in the household series (195,000) was only about half the size of the average monthly increase �n January and February. However, the figures on payroll employment of business establishments, which are less volatile from month to month, did not show a slowdown. Payroll employment rose 324,000 in March, compared with an average monthly rise of 275,000 in January and February, and a 370,000 monthly rise in the fourth quarter. Construction employment rebounded in March because of improving weather; and employment increased strongly again in manufacturing, especially in durable goods industries.

Electrostatic Copy Made

for Preservation Purposes

- 2 -

The length of the workweek went up in March, and with employment also increasing, aggregate hours worked rose by 0.8 percent for the total private nonfarm economy, 0.7 percent in manufacturing, and 4.4 percent in construction.

These figures on employment and hours worked indicate that the pace of economic expansion continues to be robust. First quarter real GNP growth will be held down by the effects of adverse weather on construction in January and February, but a rebound in that sector is now underway. Unless the figures on retail sales for March that become available early next week are weak, our concern that the economy is growing too fast early this year will be confirmed.

THE WH\TE H

OUSE

WASHINGTON

4/6/79

Fred J.

-.

(If Option la is selected, please see page 3)

Dear Secretary Bergland:

Extreme inflation in the price of food is imposing a

heavy burden on every American. Beef prices in particular

are so high that many people can no longer afford to buy it.

The reason for high inflation rates in beef -- shortages

caused by the five-year decline in the cattle herds

will persist until farmers and ranchers have an opportunity

to build their herds, a long and slow process.

There is a strong probability, therefore, that beef

will remain in short supply and prices will remain high at

least through 1980.

Fortunately, there are good high protein substitutes

available at prices that make it possible to stretch the

shrinking food dollar and still provide equally nutritious

meals. I'm certain the American shopper will be taking

advantage of these better buys in the months ahead.

I believe the Federal Government should be a prudent

shopper, too. The Department of Agriculture is. the second

largest buyer of beef in the Government. Last year you

bought 134 million pounds for the Federal school lunch pro

gram. This year, I am informed, you have re¢uced this total

to 106 million pounds, a cut of almost 21%, in your continuing

effort to maintain high protein school lunches within your

budget.

Secretary Bergland - 3 - '

of Federal food expenditures. Early completion of this

action will eliminate from Federal food procurement the

unnecessary inconsistencies that prevent us from getting the

maximum benefit from the Federal food dollar.

(If Option la is selected, insert 15% in place of 25% in the second paragraph, page 2, and add the following paragraph thereafter.)

I want you to review your progress with Alfred Kahn at

the end of six months to consider whether additional re-

ductions will be possible.

(If Option la is selected, please see page 3)

Dear Secretary Brown

Extreme inflation in the price of food is imposing

a heavy burden on every American. Beef prices in parti-

cular are so high that many people can no longer afford

to buy it.

The reason for high inflation rates in beef

shortages caused by the five-year decline in cattle herds --

will persist until farmers and ranchers have an opportunity

to build their herds, a long and slow process.

There is a strong probability, therefore, that beef

will remain in short supply and prices will remain high at

l east through 1980.

Fortunately, there are good high protein substitutes

available at prices that make it possible to stretch the 0

shrinking food dollar and still provide equally nutritious

meals. I'm certain the American shopper will be taking

advantage of these better buys �n the months ahead.

I believe the Federal Government should be a prudent

shopper, too. This means reducing beef purchases in the

face of very high prices and a continuing decline in avail-

able supplies.

/

Secretary Brown - 2 -

The Department of Defense is the largest buyer of

beef in the Government. Last year you bought 108.5 million

pounds; t his year you project purchases of about 126 million

pounds, a 16% expansion at an average price 17 percent

higher than you paid last year.

I direct you to reduce your purchases of beef for the

remainder of this year and for Fiscal Year 1980 by at least

25% from �his planned level. You may however phase in this

reduced purchase rate during the rest of Fiscal Year 1979

to minimize unreasonable disruption of your food service

operations.

You should at the same time make certain that this

�reduction in no way dilutes the high nutritional and quality

standards the Department of Defense has established for its

food service program.

I understand that your Food Planning Board has just

approved the use of a 20 percent soy extended g�ound beef

product. I applaud this kind of innovative diet planning

that maintains high protein standards and assures that our

armed services personnel continue to enjoy the same high

quality meals they have enjoyed heretofore.

I am issuing similar directives to th� Secretary of

Agriculture and the Administrator of Veterans Affairs to

Secretary Brown - 3 -

reduce their beef purchases this year and next. In addi -

tion, I am ask ing you t? work more closely with them in

the co ming months under the government-wide foo d quality

assurance and specifications management program that we

started last year, to produce more rapid improvements in

the cost- effectiveness of Federal food procurement. To

accelerate that effort, I have directed the Secretary of

Agriculture to co mplete unification b� the end of Fi scal

Year 19�0 of the high dollar specifications which account

for more than 80% of Federal food expenditures. Early

completion of this review will eliminate from Federal

food procurement the unnecessary inconsistencies that

prevent us from getting the maximum benefit from the

Federal foo d dollar. I know you will give the Secretary

your full support.

(If Option I a is selected, insert 15% in place of 25% in the second paragraph, page 2, and add the following-paragraph thereafter.)

I want you to review your progress with Alfred Kahn at

the end of six months to consider whether additional

reductions will be possible.

(If Option Ia is selected, please see page 3)

Dear Mr. Cleland:

Extreme inflation 1n the price of food is imposing

a heavy burden on every American. Beef prices in particu

lar are so high that many people can no longer afford to

buy it.

The reason for high inflation rates in beef -- short

ages caused by the five-year decline in cattle herds -

will persist until farmers and ranchers have an opportunity

to build their herds; a long and slow process.

There is a strong probability, therefore, that beef

will remain in short supply and prices will remain high

at least through 1980.

Fortunately, there are good high protein substitutes

available at prices that make it possible to stretch the

shrinking food dollar and still provide equally nutritious

meals. I'm certain the American shopper will be taking

advantage of these better buys in the months ahead.

I believe the Federal government should be a prudent

shopper, too. This means reducing beef purchases in the

face of very high prices and a continuing decline 1n

available supplies.

The Veterans Administration is the third largest buyer

of beef in the Government. Last year you bought 8.4 million

pounds of beef to feed the patients under your care in the

Mr. Cleland - 2 -

Veterans Administration hospital system. This year, you

project purchases of about the same amount of beef, but

at an average price per pound 25 percent higher than you

paid last year.

I direct you to reduce your purchases of beef for

the remainder of this year and for Fiscal 1980 by at least

25 percent from this planned level. You may, however,

phase in this reduced purchase rate during the rest

of Fiscal Year 1979, to minimize unreasonable disruption

of your food service operations.

You should at the same time make certain that this

reduction in no way dilutes the high nutritional and quality

standards the Veterans Administration has established for

its food service program.

I understand that earlier this year you reduced the

number of beef meals served in Veterans Administration

hospitals from 10 to 7 per week for normal diets, and

from 14 to 10 for selective diets. I applaud this kind

of initiative and urge you to continue to pursue innovations

1n diet planning that maintain high protein standards

while assuring that our veterans continue to enjoy the

same high quality meals they have enjoyed heretofore.

I am issuing similar directions to the Secretary of

Defense and the Secretary of Agriculture to reduce their

beef purchases this year and next. In addition, I am

Mr. Cleland - 3 -

asking you to work more closely with them in the coming

months under the government-wide food quality assurance

and specifications management program that we started

last year, to produce more rapid involvements in the

cost-effectiveness of Federal food procurement. To

accelerate that effort, I have directed the Secretary of

Agriculture to complete unification by the end of Fiscal

Year 1980 of the high dollar specifications which account

for more than 80 percent of Federal food expenditures.

Early completion of this action will eliminate from Federal

food procurement the unnecessary inconsistencies that pre

vent us from getting the maximum benefits from the Federal

food dollar. I know you will give the Secretary your

full support.

(If option Ia is selected, insert �% in place of

�% in the second paragraph, page 2, and add the following

paragraph thereafter.

I want you to :rreview your progress with Alfred Kahn

at the end of six months to consider whether additional

reductions will be possible.)

OPTION II

Dear Secretary Bergland:

Extreme inflation in the price of food is imposing a

heavy burden on every American.

Fortunately, there are.some substitutes available

at prices that make it possible to stretch the shrinking

food dollar and still provide equally nutritious meals.

I'm certain the American shopper will be taking advantage

of these.

better buys_in the months ahead.

I believe the Federal Government should be a prudent

shopper, too. I know the Department of Agriculture has

been working hard and successfully to reduce purchases of

high-priced, short-supply items in the commodities it

buys for the Federal school lunch program, and to shift

to lower priced substitutes that maintain the high quality

of school lunches.

I applaud this progress. I believe, however, that

a greater effort is necessary in the face of very high

food prices and the probability of continuing shortages.

I want you to review,:in consultation with Alfred

Kahn and my other advisors, your food purchase plans for

the rest of this year and next in light of the inflation

rates that have been occurring in the major commodities

you plan to buy, and the outlook for supplies and rela

tive prices of available substitutes. Please report to

-2-

me by April 15 the results of this review, including

the specific changes you intend to make in the quantities

you purchase of various pertinent foods. You should at

the same time make certain that these reductions in no

way dilute the high �utritional standards and quality

of the lunches we provide to our country's 26.5 million

participating school children.

I ask you and your dedicated staff to accept my

appreciation of your continuing efforts to find ways of

improving the high protein value of the school lunch

menu in ways that get the most for your budget dollar.

I am issuing similar directives to the Secretary

of Defense and the Administrator of Veterans Affairs

to make their food purchasing decisions more price

sensitive for the remainder of this year and for 1980.

In addition, I am asking them to work more closely with

your Department in the coming months under the govern

ment wide food quality assurance and specifications manage

ment program that we started·last year, to produce more

rapid improvements in the cost-effectiveness of Federal

food procuremerit. To accelerate that effort, I am

directing you to complete unification by the end of

Fiscal Year 1980 of the high dol�ar specifications,

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which account for more than 80% of Federal food expendi

tures. Early completion of this action will eliminate

from Federal food procurement the unnecessary inconsis

tencies that prevent us from getting the maximum benefit

from the Federal food dollar.

OPTION II

Dear Secretary Brown:

Extreme inflation in the price of food is imposing

a heavy burden on every American.

Fortunately, there are good substitutes available

at prices that make it possible to stretch the shrinking

food dollar and still provide equally nutritious meals.

I'm certain the American shopper will be taking advantage

of these better buys in the months ahead.

I believe the Federal government should be a prudent

shopper, too. I know the Department of Defense has been

working to reduce purchases of high-prices, short-supply

items in the commodities it buys for your food service

program, and to shift to lower priced substitutes. I

understand, for example, that your Food Planning Board

has j ust approved the use of a 20 percent soy extended

ground beef product. I applaud this kind of innovative

diet planning that maintains high protein standards and

assures that our armed services personnel continue to enj oy

the same high quality meals they have en j oyed heretofore.

I believe, however, that a greater effort is necessary

in the face of very high food prices and the probability

of continuing shortages. I want you to review, in

consultation with Alfred Kahn and my other advisors, your

food purchase plans for the rest of this year and next

in light of the inflation rates that have been occurring

Secretary Brown - 2 -

in the major commodities you plan to buy, and the outlook

for supplies and relative prices of available substitutes.

Please report to me by April 15 the results of this review,

including the specific changes you intend to make in the

quantitites you purchase of various pertinent foods.

You should at the same time make certain that this

reduction in no way dilutes the high nutritional and quality

standards the Department of Defense has established for

its food service program.

I am issuing similar directives to the Secretary of

Agriculture and the Administrator of Veterans Affairs to

reexamine their food purchase plans this year and next

and to report to me on the results. In addition, I am

asking you to work more closely with them in the coming

months under the government-wide food quality assurance

and specifications management program that we started

last year, to produce more rapid improvements in the cost

effectiveness of Federal food procurement. To accelerate

that effort, I have directed the Secretary of Agriculture

to complete a unification by the end of Fiscal Year 1980

of the high dollar specifications which account for more

than 80 percent of Federal food expenditures. Early com

pletion of this action will eliminate from Federal food

procurement the unnecessary inconsistencies that prevent

us from getting the maximum benefits from the Federal

food dollar. I know you will give the Secretary your

full support.

OPTION II

Dear Mr. Cleland:

Extreme inflation 1n the price of food is imposing a

heavy burden on every American.

Fortunately, there are good substitutes ava�lable at

prices that make it possible to stretch the shrinking food

dollar and still provide equally nutritious m�als. I'm

certain the American shopper will be taking advantage of

these better buys in the months ahead.

I believe the Federal government should be a prudent

shopper, too. I know the Veterans Administration has been

working to reduce purchases of high-priced, short-supply

items in the commodities it buys for your hospital food

service program, and to shift to lower priced substitutes.

I believe, however, that a greater effort is necessary in the

fact of very high food prices and the probability of con

tinuing shortages.

I want you to review,in consultation with Alfred Kahn

and my other advisors, your food purchase plans for the rest

of this year and next in light of the inflation rates that

have been occurring in the major commodities you plan to buy,

and the outlook for supplies and relative prices of available

substitutes. Please report to me by April 15 the results of

this review, including the specific changes you intend to make

Secretary Cleland - 2 -

1n the quantities you purchase of various pertinent foods.

You should at the same time make certain that these reduc-

tions in no way dilute the high nutritional and quality

standards the Veterans Administration has established for

its food service program.

I urge you to pursue innovations in diet planning that

maintain high nutrition standards while assuring that our

veterans continue to enjoy the same quality meals they have

enjoyed heretofore.

I am issuing similar directives to the Secretary of

Defense and the Secretary of Agriculture to reexamine their

food purchase plans this year and next and to report to me

on the results. In addition, I am asking you to work more

closely with them in the coming months under the government-

wide food quality assurance and specifications management

program that we started last year, to produce more rapid

improvements 1n the cost-effectiveness of Federal food pro-

curement. To accelerate that effort, I have directed the

Secretary of Agriculture to complete a unification by the

end of Fiscal Year 1980 of the high dollar specifications

which account for more than 80 percent of Federal food

expenditures. Early completion of this action will eliminate

'

from Federal food procurement the unnecessary inconsistencies

Secretary Cleland - 3 -

that prevent us from getting the maximum benefits from the

Federal food dollar. I know you will give the Secretary

your full support.

' '

_., THE WHITE HOUSE

WASHINGTON

April 6, 1979

MEETING WITH REPRESENTATIVES OF MAJOR OIL CORPORATIONS

Friday, April 6, 1979 1:45 p.m. {!al)� 13vo---

From: · Anne Wexler A� Stu Eizenstat J)JIJ

I. PURPOSE

To encourage the major oil producers to increase oil production and to seek their support of the total energy package.

II. BACKGROUND

The American Petroleum Institute's convention is presently occurring .in New Orleans so that the chief executive officers could not attend this meeting. Instead, the Washington representatives of the major oil companies and trade associations are attending and will carry the message back to their chief executives.

III. TALKING POINTS

Talking points are attached.

IV. PARTICIPANTS, AGENDA AND PRESS PLAN

A. Participants: Representatives of the seven big oil companies, Exxon, Mobil, Ch�ron, Texaco, Gulf, Sheil, BP, and A.,BCO; and ofthe AIDericanPetr"Oleum Institute and Mid-Continent Oil and Gas Association (list attached).

Electrostatic Copy Made

for Preservation Purposes

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,' _ .··

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B. Agenda: You will open the meeting. Following your remarks, �tu Eizenstat and Eliot Cutler will conduct a detailed briefing.

C. Press: No press will attend.

April 6� 1979

Talking Points

Last night I announced an energy program that follows the position that all of you have been advocating - the decontrol of oil prices.

I took that step, at considerable political and inflationary risk, because I ·am convinced decontrol is in our country's best economic and ·energy interests.

You now have the power and ability to prove that my judgment was correct. Your decisions from today forward will determine whether decontrol is just a pricing mechanism to increase energy costs for consumers or truly a system that will lead to greater domestic oil exploration and production. Your credibility with the American people, as well as mine, is at stake if oil exploration and development in this co�ntry does not increase substantially.

I believe you are greatly concerned about our energy future and security, and you will begin efforts to expand your domestic exploration and production. I want you to take advantage of the pricing increases to look for new oil, to use enhanced recovery techniques, to put all of our unused rigs back into operation. In short, I would like a commitment from you that you will greatly step-up your domestic production efforts.

The policy I announced last night will work if we have not only your increased exploration and development but also your public support. 'I am not seeking your public praise, or to get votes in certain parts of the country. I am seeking your public assurances to the American people that, in your expert view, the decontrol policy will lead to greater production and energy security for the country.

I certairily recognize that one of the effects of decontrol will be to transfer, over the next three years, about $16-18 billion in revenues away from consumers and to you. I could not sanction such a transfer unless there was a mechanism to give some of that money back to the American people, through a "windfall profits" tax. The tax I have proposed still leaves you with substantial revenues for increased domestic exploration and development. But I cannot justify letting you have all of the additional revenuesA

I have taken a great political risk in proceeding with decontrol without making it contingent on a tax. I did not do so because I was concerned that a direct linkage would have produced no tax and therefore no decontrol.

/

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Despite the fact that I have not explicitly tied the tax with the decontrol, I am determined to fight for the tax with all my resources and'powers. I believe the American people will be strongly supportive of the tax - both because of their concern about undue profits and their recognition that the use of the funds for energy research and development will ultimately make us energy secure�

I believe it is in both your long term and short term interests to support the tax in the form I have proposed. Oil company profit statements will be coming out soon. Whatever you believe about the profit level, you will have a credibility problem even before·we decontrol one drop of oil.

I do not want a dangerous, drawn-out battle with you over the tax, but I am fully prepared for it if you are going to oppose the tax. I think your opposition to the tax will not only hurt your public image and your relationships with my Administration, but it will create further opposition throughout the country to decontrol and could lead to Congressional efforts to soften the decontrol path I have proposed.

I would like to know whether you can support the tax. If you cannot let me know now, I would like you to send me a letter as soon as possible with your position.

I do not enjoy taking on another major legislative battle. But I am prepared to do so if you do not support the tax. I urge you to do _so.

I hope that in the future we can work together closely to put into place a sound energy policy for our-country. Working together, we can ensure such a policy.

PARTICIPANTS

Charles Sandler Federal Relatidns Director American Petroleum Institute

Wayne Gibbens President Mid Continent Oil and Gas Association

Donald Smiley Vice President Exxon

John Philbin Manager, Government Relations, U.S. Marketing and Refining

Division Mobil

Robert Kenney Assistant to the Senior Vice President Texaco

Frank Bradley Vice President Chevron

L. Hill Bonin, Jr. Vice President and Executive Director

and Wayne Harmon Director, Federal Agency Relations Gulf

David Gross Vice President Shell

Roberta Severo Legfs. Assistant BP

Hollis Dole Washington Representative ARCO